- Singapore recession over ?!?!

Singapore recession over ?!?!

Written by Wilfred Ling

Thursday, 19 November 2009

I read that Singapore recession is over! See the ChannelNewsAsia link HERE. We had a positive GDP growth in two consecutive quarters! Is this for real? Seems like a dream!

It seems this recession was like forever but actually it was just a year ago when all things just keep on collapsing and big names like Lehman Brothers went kaput while AIG had to be bailout wiping out shareholders' value to almost nil. Remember those couple of months that prices of market indices just keep on coming down every day by 2% and it just keep on going on and on like as if it would be like this forever. One client said to me that she thought that it could be possible to see her portfolio go to zero by the looks of the way the market just keep on going down in one straight line. It isn't also very nice to be scolded when I advised some of my clients that RSP is the best principle and not selling out of the portfolio. Most listened to me while others did not. Woe to them.

In the meantime, FTSE STI surged from the low of March of 1456.95 to 2758.79 today. This represents 89% appreciation. This is quite typical of equity market reacting earlier than the economic recovery. From March to end of September it is EXACTLY six months. Equity market is always considered to be a leading indicator of the economy. Of course, if you were in March, you would never knew that the equity market was going to surge in anticipation of the economy recovery for it could merely be a technical rebound known as the bear trap. But if you had waited for official announcement that the economy has recovered, you would have missed the massive rally. So would anyone dare to invest anything right now when the market has surged so much? There are two very simple rules - what goes up must come down. What come down, must go up. Just make sure you action is synchronized in your favor.

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